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To Grow a Hot New Payments Business, Focus on the Mundane

Posted March 10, 2015 by Editor

This post was written by Udaya Patnaik, Co-Founder of Jump. You can find him on Twitter @UdayaJump, or get in touch with him by commenting on this post.

Some of the biggest announcements at Mobile World Congress 2015 are coming from Samsung, Google and PayPal, who are trying to chase Apple’s recent success in mobile payments. Apple launched ApplePay on October 20, 2014. Four months later, Apple Pay now processes $2 of every $3 spent on contactless payment transactions. That's good news for Apple, which makes about 0.10% on every Apple Pay transaction. Within the next two or three years, Apple Pay could spring a new revenue stream of over $300M.

All of the new announcements highlight five best practices for any company trying to grow a significant business in payments. Consider these the table stakes - the mostly-obvious, minimally required principles to follow.


Become the preferred or default payment.

Companies like Uber and Amazon often ask users to put in a default credit card number as a one-time selection for all transactions. Even credit card companies like American Express offer deals or rewards multipliers for making their payment vehicle your standard. To see increased adoption, Samsung, Google, Apple or anyone else is likely going to have to take similar steps to position their system as the preferred, if not default, payment method for retailers and sellers.

Diversify compatibility across networks.

A year after launch, Google Wallet still only worked with one credit card and bank combination on one wireless network: Sprint. After only a few months, Apple Pay already works across all major carriers. It works with more than 70 different issuing banks and on the Visa, American Express, and MasterCard networks, accounting for 90% of the credit card purchase volume. Adding Discover’s network would open up access to a few million more domestic US users, as well as product users of Discover’s partners like PayPal and JCB. When Apple wants to open up Apple Pay in China, getting on UnionPay will be essential. Recognizing the importance of diverse compatibility, on February 25, 2015 Google announced a deal to put Google Wallet on Android phones from Verizon, T-Mobile and AT&T.

Keep merchants and the rest of the ecosystem happy.

Winning in payments means recognizing that there is a complex, integrated network of partners, all of whom expect a portion of the revenue. CVS and others have a competing system called CurrentC, so they’re blocking Apple Pay and all NFC-based transactions in their stores. Apple and the financial network involved both get a cut of each Apple Pay transaction, which means less money for the merchants. Apple justifies its fees by offering tokenization to verify and secure transactions – a feature that Google’s forthcoming Android Pay intends to offer as well. Google also throws discount offers (read: ads) at Wallet users. PayPal charges $0.30, plus 1.9-2.9% of the value of the transaction, and on March 2, 2015, it bought Paydient, who makes CurrentC’s technology. To keep all of its various partners satisfied, Apple and others may need to provide other benefits, like transaction data analysis or market intelligence.

Increase the number of usable points of sale.

Payment terminal manufacturers like VeriFone and Ingenico are always looking for new ways to demonstrate their critical role in enabling transactions. Square gives out its iconic card reader to participating business owners and service providers, and even created its own register stand and hardware hub. Samsung recently announced its Samsung Pay system will use magnetic secure transaction (MST) technology to allow its phones to work with older swipe-only terminals that lack the tap-and-pay functionality offered by NFC. And Apple has begun partnering with USA Technologies, which handles cashless payments for everything from vending machines to laundry machines.

Assure end users that they’re protected.

People need actual protection as well as the perception of security from unauthorized uses and identity theft. Credit card skimmers and hackers who capture retailers’ and banks’ credit card data have upped the ante. There are now reports of how banks are lax about “provisioning fraud,” allowing scammers to set up new iPhones with stolen credit card and social security numbers. Better fraud detection algorithms, no-liability-for-fraudulent-use policies, and identity monitoring services help minimize a consumer’s exposure once an invalid purchase is made. Biometric validation like TouchID on Apple’s iPhones give people a stronger sense of security – “it’s my fingerprint” – and make it harder for anyone else to make a purchase.


Of course, these table stakes are the practices that everyone has to do to succeed. And every company will try to dazzle users with cool technology. But to truly differentiate one’s payment business from the sea of competitors, look beyond these five principles and the gizmos. Instead, focus on the mundane.

For a new high-tech payment solution to fully replace a physical card, we can’t ignore the obvious, yet less sexy challenges to the payments experience. Three of the biggest problems right now are:


The last 5% of battery problem.

Expanding battery life is quickly becoming one of the most important focuses of technology R&D teams. It’s even more critical for payments. What happens when you need to make a purchase but your phone ran out of juice? A reserve battery, quick display mode or quick charging can help fix this for a few seconds, but we need more than that to complete a transaction. As our device’s battery life begins to dictate our behavior in payments, payments businesses could benefit from investing in power solutions. With other technologies like phone-based driver’s licenses (Iowa and others are pioneering this technology), this is going to become an increasingly pervasive problem. It seems unlikely that “Sorry, Officer, my digital ID watch died…” will be a passable excuse for why you don’t have your driver’s license.

The cancellation problem.

It used to be that if you lost your wallet, you called American Express, canceled your credit card, and had a new one overnighted to you, or you picked up a new one at a certified travel agency. That process has been streamlined, so you can now cancel it through an app or online. Canceling a phone, however, is a painstaking process of dealing with terrible telecom call center staff, wireless contracts, early termination fees, lost passwords, data transfers, and more. As our smartphones, tablets and wearable devices become more central to our financial lives, such an onerous process won’t be tolerated. In order to succeed as a payment platform, Apple and its competitors will have to help make canceling a phone as easy as canceling a credit card.

The cold hard cash problem.

If all of these technological solutions are pushing for an increasingly cash- and paper-less marketplace, we need to allow those who primarily rely on cash and check transactions to participate. Ask any parent who has had to give money for field trips, music lessons or sports uniforms and you’ll quickly see that Americans still use cash and checks for nearly 34% of the value of payments they make annually. Globally, cash and checks still account for 85% of consumer transactions. Solutions like prepaid debit cards, person-to-person payment apps, and accounts you can charge up and monitor are potential answers for payers; however, they require recipients to give up the benefits of cash and check transactions. Having solutions for those times when we need to rely on the physical exchange of money will be central to making any new payment system as ubiquitous as cash and credit cards are today.


As the race for new payment formats continue, many financial institutions and tech companies will spend all their time optimizing the table stakes and the gee-whiz gadgets. And to be clear, the table stakes need to be met. But to really capture market share and grow a new differentiated payments business, it’s equally important to focus on the mundane.




The Intellectual Role of TV Content and Why Networks Should Care

Posted February 25, 2015 by Editor
Categories: Hybrid Thinking

This post was written by Anna Zhi, a strategy consultant at Jump. You can find her on Twitter @azhyi, or get in touch by commenting on this post.

We are in a new era of media creation and consumption.

To date, The Interview has made $31 million in online and video-on-demand sales since its release right before Christmas—proof that you can successfully release a movie online. In only its second season, Netflix’s House of Cards—an online-only Netflix exclusive—received 13 primetime Emmy award nominations. Its lead man, Kevin Spacey, won his first Golden Globe for best actor in a TV series for his role in House of Cards—more proof that a network can successfully release an online only series. It’s clear that Netflix has emerged as a major cable competitor. In 2014, pay-TV subscriptions recorded their first full year of decline, and studies show that more people are abandoning cable (or never getting it in the first place).

This break from traditional TV means that new occasions around watching TV are proliferating. TiVo, the first behavior changer, allowed consumers to pause and play TV. Now, streaming and downloading means consumers can get entertainment anytime they want it, anywhere they want it. This freedom to watch gives rise to new types of on demand watching behavior, the most infamous of which is binge watching.

Binge watching is a well-known part of popular culture, so much so that scientists are studying the effects of our unconstrained media usage on the body, noting some negative effects. But television is also a positive force—people come home to unwind to sitcoms and enjoy favorite dramas with family. TV networks such as HBO and Showtime have shown that intellectually challenging content is not only successful, but generates customers that are loyal and willing to pay for content.

The amount of intellectual depth in different TV shows falls along a spectrum, from most to least intellectually demanding. Most people watch a variety of content along the spectrum, depending on their mood and appetite for certain types of entertainment, and they usually have habits and preferences for how much of different types of content they want to watch.

On the extreme end of intellectually demanding content are documentaries and other educational programming—content that people watch to better themselves. Next come the hard-hitting, award winning shows, from AMC’s Mad Men to Breaking Bad and, more recently, Netflix’s House of Cards. These are the types of shows where people pause and take a breath after each episode, read analysis, and, like great literature, write essays dissecting all the hidden meaning, layers, and development on every level of the show. These shows are latent with symbolism, meaning, and most of all, detail. To get the full experience, one must actively engage and pay attention to the bigger picture woven throughout the series, as well as the one being painted in the episode. These are not the types of shows meant for multitasking.

Edge down the spectrum a little bit and shows like HBO’s Game of Thrones or Showtime’s Spartucus appear, which have a fairly complex plot and are heavier than many shows, but also contain plenty of gratuitous sex and violence for pure entertainment purposes. Keep going down the spectrum and things become more soap-opera-like—think ABC’s Grey’s Anatomy and Scandal.

Then come sitcoms, the staple for a quick shot of feel-good. They generally reflect and validate the culture and values of their audience. Characters aren’t very complex, plot lines are straight forward even if a few episodes are missed, laughs rely on a set of obvious and beloved motifs, and usually by the end of the episode, everything is the same as it was at the beginning. Everyone has a favorite in this category, shows like CBS’s The Big Bang Theory and ABC’s Modern Family.

Finally come the guilty pleasures, from MTV’s Jersey Shore to 16 and Pregnant. These shows are formulaic, cheap to produce, require little emotional attachment, and are often used as background noise.

For consumers, this breadth of content can easily lead to overconsumption. Perhaps just like the food pyramid, a balance of content across the spectrum is the healthiest option for our content overloaded lifestyle. Everyone has his or her own tastes and preferences, so what exactly does a balanced media palate look like? Two to three heavy hitters, some nightly news and a few sitcoms? Who should be responsible for ensuring that our children consume a variety of content? Parents? Teachers? The government? Or the TV networks themselves?

In a capitalist society where people vote with their wallets, it’s become clear that it’s in networks’ best interests to offer up balanced options for viewing. Here are some lessons to take away in a new era of media consumption:

Just as consumers need balanced consumption, so too should networks provide balanced offerings. A media analyst recently called HBO “one of the most successful growth businesses in all [of] media.” That’s no accident in a time when consumers are choosing to pay for content from the more intellectually stimulating side of the spectrum and downloading other shows.

For networks, it’s no longer enough to make just sitcoms—they need to specialize and be known for a certain type of content that people will pay for, with other potential options and a more balanced spread across the spectrum. Produce a mix of content so the audience doesn’t get overwhelmed or bored. Networks need to care about how much intellectual depth their audiences consume if they want paying customers.

Certain shows are meant to be enjoyed in certain ways. Produce and release accordingly. The greater the information and artistry, the more intentional we should be about how we watch our shows. Binge watching may work for some, but in many cases, it actually decreases overall enjoyment around watching shows. Sitcoms may be fine for binge watching, but deeper and darker shows aren’t. Binge watching cuts out the time for meaning to sink in and analysis to happen, ruining the effect of cliffhangers and intentional pauses between seasons.

Networks need to take into account how consumers are most likely to watch depending on the medium. Where, when, and how a show is released will determine if people get together to throw a party to watch, stay up all night, or watch intermittently during a commute. Produce and release content in the manner most conducive to its consumption. Different content needs to be consumed in different ways.

Heavy-hitting content is here to stay. People are able to vote for the type of content they want with their clicks and their wallet. With the success of HBO, Netflix, and more recently, Amazon’s exclusive shows, viewers are showing that they want real content that is thought provoking and says something about our society. People are willing to subscribe and pay for more substantive content.

With high quality content, people are more likely to want to view it in a high quality setting, so they’ll dish out some money for the real version instead of a blurry low res one. Let consumers vote with their viewing. The most successful (HBO et al.) networks are already doing this. With cable on its way out, the rest of the big networks need to follow suit.

Offering up a spectrum of options for consumers will help ensure that networks have a sustainable audience to which they can continue offering content. The booming success of HBO, Showtime, and others proves as much. As consumers continue selecting the content they want, it’s only a matter of time before those networks that offer only certain types of content will die out.

Networks such as MTV, TLC and Cooking Channel are already struggling and attempting to produce more intellectually demanding content. Balanced consumption should be an integral element in any media company’s product strategy today.

Need to Solve Tough Problems? Go Back to Kindergarten

Posted February 12, 2015 by Editor
Categories: Leadership

This post was written by Mike Smith, Director at Jump Associates. You can get in touch with him by commenting on this post.

I had a revelation at work the other day. I needed to build a daily schedule for a team tasked with solving a gnarly problem. It was going to require focused individual thinking, group discussion, and careful execution to solve. But, when I finished planning I realized it looked exactly like something I’d seen before.

If tackling tough problems, keeping people engaged, and making sure things stay on track all while encouraging personal growth doesn’t seem familiar, I’ll give you a hint: it looked a lot like a day at kindergarten.

My method of scheduling tasks has been influenced by Tony Schwartz’s book The Way We’re Working Isn’t Working, in which he proposes that the core issue we face in today’s business world isn’t one of time management, but of energy management. By structuring our days around focused blocks of dedicated time with discrete start and finish lines and then periodically replenishing our physical, emotional, mental, and spiritual states, people get more done and stay happier.

It’s hard to imagine a group of people with greater peaks and valleys in energy through the day than kindergarteners. Some of the same techniques that worked for their classroom will work equally well in your office. Here are five principles you should try.


Define bounded work blocks with distinct starts and endings to break the day into a series of discrete, focused activities. 

People aren’t like computers; feeling in the groove may make folks want to work longer, but our work suffers when we run for long periods of time. My local kindergarten (I Googled it) has class periods that are 90 minutes long. Mimic those 90-minute periods and enforce their boundaries as much as possible.

Embed physical renewal periods between focused work blocks to recharge and prepare for the next task. 

Schools put recess between class periods for the same reason: the physical activity resets and recharges kids’ brains. Your team probably isn’t made up of 5-year olds, but this principle still rings true. Take a walk. Run out for coffee with the team. Do a drawing. It helps. Seriously.

Equip your workspace to give folks the opportunity to work movement into the day. 

Schools have learned that PE class helps kids do more than prepare them with lifelong dodgeball skills; it helps them perform better in their academic classes as well. In fact, regular exercise changes the brain to improve memory and thinking skills. Balance balls and chin-up bars can be used to keep focus for those who need to move their bodies to stay engaged. For others, those same tools might be just what’s needed for renewal between work blocks.

Set aside time for folks to go deep on individual work with the support of others, for times when two heads are better than one. 

Whether for independent study in the classroom or solo time for homework in the evening, many kindergartens encourage solo time for kids to do tough thinking on their own with teacher and adult supervision for those tough questions. To mimic kindergarten structures, schedule some of this solo-think time into your day—but don’t forget to ping expertise of others for specific questions or times you need a sounding board.

Set rules about when and where potentially distracting inputs are allowed. 

Recent research has shown that even just a heavily decorated classroom can disrupt attention and learning in young children. No matter how much we like to think we are, people aren’t great at multi-tasking. Need to knock out 100 to-dos? Great. Block it out and do it distraction-free. Need to respond to the morning’s emails? Great, do it. But don’t do it in a way that’s disruptive to other kinds of focused work.

The next time you and your team are tasked with solving a problem and having trouble staying focused enough to do it, think back to your days in kindergarten. Say what you will about the current state of public schools and the lagging state of education, but the basic structure of kindergarten and elementary school does a better job at maintaining people’s energy throughout the day than most offices I’ve worked in over the years.

photo credit: Stop when... via photopin (license)

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